Boards aren't doing more strategy, despite the crisis

Corporate boards aren't spending any more time and effort on strategic matters than they were before the financial crisis, according to a survey by the consultants at McKinsey. "Corporate boards are under pressure to take more responsibility for developing strategy and overseeing business risk after the financial crisis exposed many cases of inadequate governance," they write. "Yet … directors report that their boards have not increased the time spent on company strategy since our previous survey." That was conducted in February 2008, seven months before the collapse of Lehman Brothers.

Just 44 per cent of respondents said the board simply reviews and approves management's strategies. Only slight more than a quarter describe board performance as excellent or very good. Moreover, the proportion of boards that formally evaluate their directors has dropped over the past three years.

Respondents said the most effective remedies would be to spend more time overall on board work, improve the mix of skills or backgrounds on the board, and have tougher and more constructive debate. Where have we heard that before?

Source document: The article is available in McKinsey Quarterly online.